ETFs to watch as coronavirus fuels wild market volatility

ETF.com Senior Staff Writer Lara Crigger joins Yahoo FInance’s Seana Smith to discuss her top ETF picks amid the market's wild swings over the coronavirus.

Video Transcript

SEANA SMITH: Welcome back. It's now time for our ETF Report brought to you by Invesco. We're going to take a look at the fixed income market.

So obviously, the financial markets have been trying to assess the economic impact of the coronavirus, just in terms of how big of an impact it will have on the economy, where there are potential investment opportunities.

Fixed income, obviously, has been subject to a lot of these volatile swings that we have been seeing in the broader markets over the last several weeks. And we have Laura Crigger of ETF.com joining us.

And, Lara, when we take a look at fixed income, Lipper was actually out with some interesting numbers. And they were just talking about the stampede that we have been seeing out of bonds, investors yanking an unprecedented $35.6 billion from US investment grade funds this week.

When we take a look at some of the bleeding that we are seeing within this space, do you think that this is just the start of something that could get a little bit uglier here over time?

LARA CRIGGER: I think so. I think we're kind of at the beginning of a stampede for the exits, for sure. We're already seeing that investors leaving the market is making some impact in terms of liquidity and trying to find prices for bonds. And that is going to impact the bond ETFs that hold the bonds themselves.

So yeah, I mean, I think it's going to be interesting times ahead, as they say, so.

SEANA SMITH: So then, Lara, so what do you advise? Or where are you seeing some areas of opportunity, then, within fixed income? Because so many times, a lot of our viewers are watching the markets-- it has been quite a wild couple of weeks. They're really searching for anywhere to put their money.

So at this point, what are your top picks here within fixed income?

LARA CRIGGER: Right. Well, so I was a little surprised when I was looking into the numbers here. I found that, year to date, there were three bond ETFs that have done very well, the PIMCO 25-year Zero Coupon US Treasury ETF-- that's ticker, ZROZ-- the Vanguard Extended Duration Treasury ETF-- that's ticker EDV-- and the SPDR Portfolio Long-Term Treasury ETF. That's ticker SPTL.

And they've been the third and fourth and ninth best performing funds of all the ETFs out there. ZROZ is up 13%. EDV is up 12%. SPTL is up 8%.

And the thing about these three funds is that they're all very similar funds. They're all three of them long-- they hold long-term, high-duration treasuries. We're talking duration around 17 to 27 years.

ZROZ has the highest duration. And not surprisingly, it's also performing the best of the three.

SEANA SMITH: All right, Lara Crigger of ETF.com. Thanks so much for joining us today.

LARA CRIGGER: Thank you for having me.